Niche-o-nomics for Technology

More and more these days it seems that the raw material for technology firms is less and less the silicon chip (oh so 1990). Instead, the startup has replaced those tiny wafers in the 21st Century.

This leads us to a much more specialized type of startup company – one that can form around discrete aspects of a very narrowly defined segment. Its founders create it, own it and then manage their risks accordingly.

Think about how many startups long to be bought out by Google. Not because they are in trouble, but because that is their mission in life. Seriously. Their mission statement is “to be purchased by Google” or Facebook.

How did this happen?

I think the starting point for me was when Cisco bought Stratcom back in the late 90s for $3.7 billion dollars. And then Cisco’s market cap went up roughly the same amount! This flew in the face of the notion that all innovation had to come from within. Acquisition was now a viable strategy in tech, as it had been in other industries for years.

What’s a marketer to do? Well, there is money to be made in being niche. So if you are in a small technology firm, try owning as defined a niche as you can – such as LinkedIn’s advertising operation. This company’s brand promise delivers on what it says while focused on a defensible position. Just don’t forget to can manage the risks.